Les réformes et développements économiques en Algérie « propices » à la transformation du secteur
The insurance market in Algeria is entering a transformative phase, spurred by ongoing financial reforms and positive economic developments, as highlighted by the international insurance rating agency AM Best. This agency’s latest report, titled « The Algerian Insurance Market: A Growth and Expansion Opportunity, » reflects a promising outlook for Algeria’s insurance sector amidst a shifting regulatory landscape.
AM Best emphasizes that Algeria’s demographic, economic, and regulatory improvements bode well for the country’s insurance market. The potential for growth, foreign investment, and profitability appears bright. The agency pointed out that the financial reforms could further enhance long-term expansion in the insurance industry. A particularly significant factor is the new insurance law currently being finalized, which focuses on stimulating market growth through the introduction of new business lines and the development of underrepresented sectors, particularly health and property insurance.
The report further establishes that these economic and demographic changes differentiate Algeria’s insurance sector from those in other Middle Eastern and North African (MENA) countries, presenting unique advantages and challenges. Notably, Algeria’s youthful population and the expanding middle class are expected to increase demand for life insurance products, making Algeria one of the few MENA nations showing significant interest in life insurance contracts.
The report notes that while the life insurance segment currently represents less than 10% of the total market, its expansion could be catalyzed through strengthening the distribution channels, particularly in bancassurance. Additionally, the Takaful segment, which launched in Algeria in 2022, shows considerable long-term growth potential, with contributions reportedly tripling this year.
As one of Africa’s top five economies and the second-largest in North Africa, Algeria has demonstrated a more resilient economic recovery compared to its regional counterparts. AM Best asserts that the size of Algeria’s economy and the rising disposable income of its citizens create favorable conditions for expanding the insurance market and improving revenue figures recorded by insurance companies.
After a contraction in premium volumes during the COVID-19 pandemic, the Algerian insurance market is rebounding. The Union of Algerian Insurance and Reinsurance Companies (UAR) reported a significant revenue increase, with the sector generating 131.7 billion DZD between January and September 2024.
Despite these encouraging developments, the report underscores that challenges remain, particularly regarding the insurance penetration rate, which measures the sector’s contribution to the country’s GDP. AM Best, based in the United States, specializes in assessing the financial strength of insurance companies across more than a hundred countries, including Algeria.
In summary, the combination of financial reforms, demographic trends, and regulatory changes positions Algeria’s insurance market for substantial growth and transformation. With a youthful population and a growing middle class, the demand for various insurance products, particularly life insurance and Takaful, is expected to rise significantly. The government’s efforts to improve the regulatory framework further complement these trends, paving the way for an insurance sector capable of attracting foreign investments and enhancing its profitability in the coming years.
